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This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Legal experts raise concerns about Tennessee’s new ELVIS Act and other laws aimed at AI-powered voice cloning; Jelly Roll faces a trademark lawsuit from a Philadelphia wedding band with the same name; Taylor Swift and other artists get their music back on TikTok; and much more.
THE BIG STORY: Are New AI Voice Laws Going Too Far?
State and federal lawmakers across the country are scrambling to crack down on voice cloning – an effort cheered on by the music industry and artists. But some legal experts are worried such laws might be an “overreaction” that could have unintended consequences.
With last month’s enactment of the ELVIS Act, Tennessee became the first state in the country to pass legislation aimed at protecting artists from situations like last year’s infamous fake Drake song. At least five other states are considering similar bills, and a federal version is currently being debated on Capitol Hill.
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Those laws address a very real problem – namely, that artificial intelligence tools have made it far easier to convincingly mimic a real person’s voice, and existing laws seem only to provide them with limited recourse to stop it.
But while legislative efforts to fix that have been broadly supported by the music industry, they’ve met a more mixed reaction among some legal experts, who are concerned that the rush to pass new laws could lead to collateral damage for free speech and other “innocuous” behavior – ranging from tribute bands to interpolations.
Other top stories this week…
JELLY ROLL TRADEMARK SUIT – The rapper-turned-country star was hit with a trademark infringement lawsuit from a well-known Philadelphia wedding band that has used the name Jellyroll for decades. The case claims that Jelly Roll’s increasing popularity over the past two years has flooded the market with the name, making it difficult for prospective clients to find “Philly’s favorite wedding band.”
TIKTOK & TAYLOR – Why is music from Taylor Swift and certain other Universal Music Group artists back on TikTok, despite an ongoing licensing feud that has seen the music giant pull its catalog from the social media platform for months? As explained by Billboard’s Elias Leight and Kristin Robinson, the answer mostly boils down to leverage and good lawyering.
LIVE NATION TO FACE SUIT – The U.S. Department of Justice is reportedly planning to sue Live Nation within a matter of weeks over alleged violations of federal antitrust laws, including that the company leveraged it dominant position over the live music industry to undermine competition for ticketing. The case follows years of antitrust criticism of Live Nation, which increased in intensity after the company’s botched handling of ticket sales for Taylor Swift’s “Eras” tour in November 2022.
NewJeans in LA on March 6, 2024.
Sami Drasin
K-POP DEFAMATION BATTLE – The K-pop group NewJeans asked a U.S. federal court to force Google to unmask an anonymous YouTube user so that the person can be criminally prosecuted in South Korea for posting “false and defamatory videos.” The case that highlighted the stark differences between defamation laws in America and Korea – where even true statements can get you hauled into court, and criminal convictions can lead to “imprisonment with labor for up to seven years.”
PANDORA HITS BACK AT MLC – The streaming service fired back at a lawsuit filed by the Mechanical Licensing Collective that claims the company has failed to properly pay streaming royalties, calling the case a “gross overreach” based on a “legally incoherent position.” The case centers on whether Pandora’s free ad-supported service is an “interactive” platform like Spotify, or more similar to a “noninteractive” radio broadcast – a key distinction under the federal copyright laws that govern royalty payments.
FAKE MERCH, REAL PROBLEMS – Bootleg artist merchandise is a big problem, as attorneys for the biggest stars in the world say they send countless takedown notices annually but that they face “a game of Whack-a-Mole” with few easy answers. Go read Billboard’s story from Steve Knopper, who chatted with numerous lawyers on the front lines in the war against fake merch.
RADIO RIGHTS SETTLEMENT – Global Music Rights, Irving Azoff’s boutique performance rights organization that reps Bruce Springsteen, Bruno Mars, Prince, Drake and others, settled a copyright infringement lawsuit in which it had accused seven Vermont radio stations of refusing to license the group’s music.
Music investing platform JKBX said on Wednesday it is partnering with SoundExchange to process payments to artists and songwriters who are a part of its creator program.
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Founded in 2022, JKBX (pronounced “jukebox”) allows everyday investors to buy royalty shares that give investors the right to a slice of the income generated by songs like OneRepublic frontman Ryan Tedder‘s “Counting Stars” through public offerings regulated by the U.S. Securities and Exchange Committee (SEC). The company, which launched its first public offering last month, aims to open up an asset class to fans and other investors that previously was only available to the wealthiest investors.
JKBX currently does not work directly with musicians like Tedder. Instead, the company’s deals are with record labels, music publishers and catalog funds that own the copyrights behind the royalties offered on the platform. But JKBX chief executive and Orchard co-founder Scott Cohen says the creator program was designed to “spread the wealth,” giving artists and songwriters a cut of the revenue generated by this new way to monetize music rights.
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“The JKBX Creator Program was designed to continually reward the creators and artists for their contributions to society,” Cohen said in a statement. “We firmly believe that the talent who creates this indispensable artform that fuels us deserves that right.”
Artists who sign up for the creator program can create an artist page on the site and earn money for the fan attention and interaction they bring to JKBX’s platform. JKBX says it tracks page views and distributes payments based on an artist’s share of traffic to the site.
The partnership with SoundExchange means JKBX will use its technology and systems to pay artists, many of whom are already registered to work with SoundExchange.
“The mission of SoundExchange is to help creators maximize the value of their work, and JKBX provides a new alternative to monetize music assets,” said Michael Huppe, president and CEO of SoundExchange, adding the platform has the potential to bring millions of fans to “invest in the craft.”
JKBX launched its first SEC-approved offering last month, a grouping of 85 projects — 69 of which involve Ryan Tedder, the songwriter and producer best known as a member of the group OneRepublic. Tedder is a songwriter or producer on tracks by Adele, Jonas Brothers and Diplo that are offered on the platform.
Share prices on JKBX are currently fixed, meaning a song’s return will fluctuate based on the amount of royalties paid out, not an increase or decrease in the price. JKBX intends to launch a secondary marketplace in 2024, according to the site’s FAQ section, that will allow investors to re-sell their shares.
As Billboard prepares to launch the physical edition of Billboard Korea, a new alliance with NAVER Pay that should unlock opportunities for its readers and the broader K-pop space.
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NAVER Pay, the South Korea-based mobile payment service, has inked a memorandum of understanding (MOU) with Billboard and Billboard Korea, ahead of the first print issue midyear.
As previously reported, Billboard Korea Volume 1 is scheduled for release in June, which will amplify 100 K-pop stars selected by Billboard.
The goal of the MOU is to promote various collaborative endeavors that will combine simple payment services with the entertainment services that Billboard Korea will provide, reads a statement, with NAVER Pay providing “a safe and straightforward” facility for music, broadcasts, and performances.
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Through the alliance, the brands will contribute to creating “a fair and transparent performance booking culture,” and in the long term, a unified approach in spreading K-pop content through Billboard’s global platform.
“We are pleased to be able to work with Billboard Korea as they enter the Korean market,” comments NAVER Pay CEO Park Sang-jin, adding, “in the future, we will actively strive to find ways to create synergy between Billboard and Billboard Korea’s various entertainment services and NAVER Pay.”
Mike Van, president of Billboard, and Yuna Kim, CEO & publisher of Billboard Korea, remark, “Through our partnership with NAVER Pay, we will be able to provide a variety of innovative services unique to Billboard in the Korean music market.”
As Billboard Korea rolls off the presses, the K-pop genre reaches new heights. South Korean acts accounted for five of the top 10 albums in the IFPI Global Album Chart for 2023, including top spot for SEVENTEEN’s FML, representing the best ever global charts performance for the genre. Indeed, an unprecedented 19 of the top 20 titles on the tally were K-pop.
And separately, the recently-published IFPI Global Recording Artist Chart, which ranks the most popular artists on the planet, based on sales and streams, four K-pop acts appeared in the top 10 – representing a record year for Korean music on a global scale.
Billboard Korea adds to the list of the publication’s international editions, including Billboard Japan, Billboard Arabia, Billboard Español, Billboard Brasil and others.
Tega Ethan, a 25-year-old singer-songwriter from Nigeria, and Taylor Zickfoose, a 28-year-old native of Washington state, are the inaugural recipients of the Bob Dylan Center songwriter fellowship.
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An initiative of Universal Music Publishing Group (UMPG) and BDC in Tulsa, OK, each fellowship includes a $40,000 project stipend, public engagement and presentation opportunities, dedicated time in the Bob Dylan Archive to study the legendary artist’s creative process, roundtrip airfare to Tulsa and accommodations, mentorship from the music publishing giant’s songwriters and executives, recording time, and more.
The two winners were selected by global panel of leading artists and songwriters, including Juliette Armanet, Patty Griffin, John Mellencamp, Carla Morrison, and Nas, and reviewed by executives at BDC and UMPG.
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“Songwriters trying to make a go of it in the modern music business need the kind of encouragement and support that this fellowship provides,” comments Mellencamp in a statement. “I congratulate Tega and Taylor on being the first two recipients, and hope they write some great songs during their time in Tulsa.”
Nearly 600 works were submitted from around the world, organizers say, based on the criteria that applicants were 18 years or older and unsigned to a publishing agreement of any kind at the time of the Fellowship start date, May, 1, 2024.
Announced last August, the fellowship is to be awarded each year to two standout talents, through an initiative that identifies, mentors and develops rising talent, doing so with the resources of the BDC.
The selection process, explains BDC creative services manager Zac Fowler, “was immensely difficult, yet enjoyable the whole way through.” Adds Fowler, “We’re excited to host Tega and Taylor in Tulsa, and look forward to hearing the music they each create during their year spent focusing on songwriting here.”
The application window for the 2025-2026 fellowship is expected to open later this fall. For more information, visit bobdylancenter.com/songwriterfellowship.
Ice Spice signed with PPL for the collection of her neighboring rights royalties. The company, which also recently signed Lewis Capaldi, will collect royalties on the rapper’s behalf for the use of her music on radio, TV and in public spaces worldwide.
Singer-songwriter Dasha, who scored a breakthrough hit with “Austin” this year, signed with WME for global representation in all areas. The rising star also recently signed with Warner Records. She’s managed by Alex Lunt at Type A Management.
BBR Music Group/Wheelhouse Records artist Elvie Shane signed with WME for global representation in all areas. His agent team includes WME Nashville office co-head Becky Gardenhire along with Jon Folk, Doug Neff, Lance Alleman and Caleb Fenn, who will work alongside various agency departments for bookings in touring, brand partnerships, digital, TV and film. Shane is set to release his newest album, Damascus, on April 19. – Jessica Nicholson (652k)
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Afro-dancehall artist Stonebwoy signed a global distribution and label services deal with ADA Worldwide, through which he released his latest single, “Ekelebe.” The agreement also includes the Nigerian rapper’s sixth studio album, which is slated for release later this year. He’s managed by Casey Kobia at KVO Talent.
Bollywood star Ayushmann Khurrana signed a global recording deal with Warner Music India, with the first release under the agreement expected to drop next month.
Independent singer-songwriter and producer yaeow (a.k.a. Lars Haggstrom) signed a global licensing deal with AWAL for his catalog and 10 upcoming songs. His first single under the agreeement, “still that kid (deep down),” will be released on May 2, with his debut album to follow.
Atlantic Records/Anemoia Records signed Bossa, a 17-year-old artist from Palm Springs, Calif., who spans various genres including hip-hop and dance. The labels will release his new single, “Go Crazy,” on Friday (April 19). He’s managed by Jen Park and Kirsten VanHoose.
Mexican indie artist Girl Ultra (a.k.a. Mariana de Miguel) signed with Ninja Tune imprint Big Dada, “a label run by Black, POC & minority ethnic people for Black, POC & minority ethnic artists,” according to a press release. Her first single on the label is “rimel.”
Echos, the artist project of Alexandra Norton, signed with Outlast Records, with the single “CAROUSEL” marking the first drop under the deal. She’s managed by Derek Brewer at Shelter Music Group.
Nashville Harbor Records & Entertainment (formerly BMLG Records) signed Noah Hicks via a joint venture with Red Creative Records. The Nashville Harbor Records & Entertainment roster also includes Riley Green, Chris Janson, Brett Young, Lady A and Greylan James. Georgia native Hicks earned a viral hit on TikTok with “I Can Tell You’re Small Town,” followed by “Dirt on It.” He’s represented by Red Light Management and WME. – Jessica Nicholson
North London producer, DJ, composer and multi-instrumentalist Jasper Tygner signed with Ninja Tune via its imprint Technicolour, which released his latest single, “Before Me.” He’s managed by Tom Aldridge at Salt Music and booked by Evan Greenberg at CAA.
The Felice Brothers signed to Million Stars, the label started by Conor Oberst; it will release the band’s new album, Valley of Abandoned Songs, on June 27. The band is booked by Eric Dimenstein at Ground Control Touring in North America and David Hughes at the Free Trade Agency for Europe and the United Kingdom.
Country singer Payton Smith signed with The Familie for management. The signing coincided with the release of his new EP, Up From Here, on Combustion Music. He’s booked by WME.
ONErpm Nashville signed singer-songwriter and American Idol alum Britnee Kellogg and released her new song, “Hell in a Handbag.” Kellogg is booked by The Kinkead Entertainment Agency in Nashville. – Jessica Nicholson
Country newcomer Timmy McKeever signed with Droptine Recordings, which released his new single, “Bullet Proof,” on April 5.
R&B artist Ariel signed with Mello Music Group. The label released her latest single, “Something Amazing,” on Thursday (April 11).
Provident Entertainment, a division of Sony Entertainment, signed The Voice season 22 finalist bodie. For his first single, the Los Angeles native released a cover of Brandon Lake’s “Gratitude,” which he performed on the season finale of The Voice. Provident Entertainment’s roster also includes Kirk Franklin, Lake, CAIN, Zach Williams and Casting Crowns. – Jessica Nichlson
Chicago band Babe Report signed with Exploding in Sound, which will release the band’s debut album, Did You Get Better, on May 31.
Independently released songs and albums accounted for almost one-third of all music consumption in the United Kingdom last year, marking the sixth consecutive year of growth for the country’s indie sector, according to new figures from labels trade body BPI.
In total, the equivalent of more than 53 million independently released albums were streamed or purchased in 2023 across digital and physical formats, representing 29.2% of all music consumption in the U.K. That number is up 12% on 2022’s figure and marks an increase of almost 30% over the number seen in 2017 when indies accounted for just over one-fifth (22.1%) of music consumption.
Helping drive growth across the indie sector was the booming popularity of physical formats, with nearly four in every 10 vinyl LPs (39%) and just under one-third of CDs (33%) bought by British music fans last year having been released by artists signed to or distributed by an independent label, reports BPI.
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Arlo Parks, Kylie Minogue, Enter Shikari, The Prodigy and homegrown rappers Dave and AJ Tracey were among the most popular indie acts in the U.K. across digital and physical formats, along with recently-crowned multi-Brit Award-winning singer-songwriter Raye, whose single “Escapism” featuring 070 Shake was one of the U.K.’s biggest hits last year with 142 million streams.
However, there are a number of provisos to consider when analyzing the apparent growth of the U.K. indie market. BPI’s analysis of the sector is based on the Official Charts Company’s (OCC) data and definitions for what counts as an independent release. In essence, that means any album or song not attributed to the three majors — Universal Music Group, Sony Music Entertainment and Warner Music Group — on the OCC database.
However, in addition to fully independent or self-released records, that broad classification includes some “indie” albums and songs distributed by major-owned companies like Sony-owned The Orchard or Warner-owned ADA. Raye, for example, is distributed by Sony-owned independent distributor Human Re Sources. BPI said it was unable to provide a more detailed breakdown of indie music consumption.
According to the London-based trade body, almost 400 indie singles and albums achieved BRIT-certified platinum, gold or silver sales status in 2023. (Platinum status in the United Kingdom is awarded for album-equivalent sales — representing combined consumption across formats — of more than 600,000 units for singles and more than 300,000 units for albums, with gold and silver awards having incrementally lower thresholds.)
In terms of vinyl releases, more than 200 indie titles sold more than 1,500 copies last year, including albums by alternative rock band Bdrmm and R&B singer Jorja Smith.
“It’s great to see independents thriving, and not just the more celebrated labels and their artists, but increasingly also a dynamic and entrepreneurial community of much smaller micro-labels and self-releasing artists that are redefining the sector and who, with support, can drive further growth,” said Femi Olasehinde, founder of U.K. indie imprint Just Another Label and BPI Council independent representative, in a statement.
Total U.K. recorded music revenue— comprising digital and physical revenues by majors and indie labels, public performance rights and synch — climbed 8.1% to 1.43 billion pounds ($1.8 billion) in 2023, BPI reported earlier this year. That’s the highest number ever achieved in the U.K. in one year, not adjusting for inflation, helping to maintain the U.K.’s long-held status as the world’s third-biggest recorded music market in IFPI’s annual rankings behind the United States and Japan.
BPI’s latest figures on the independent sector are taken from “All About The Music 2024,” the 45th edition of its yearbook measuring the state of the U.K.’s recorded music industry, which was published Tuesday (Apr. 16).
Included among BPI’s analysis are newly released statistics about the U.K. vinyl market, which climbed 18.6% to 142 million pounds ($181 million) in 2023, marking the 16th consecutive year of growth.
BPI said the rising popularity of pop releases helped drive the rise in vinyl revenue, with the genre accounting for nearly a quarter of the market (23.7%) of U.K. vinyl sales, up from 19.6% the previous year, on the back of big-selling albums by Taylor Swift, Olivia Rodrigo and Lewis Capaldi.
Hip hop/rap also grew its share of the vinyl market to 5.3% in 2023, led by a re-issue of De La Soul’s 1989 debut, 3 Feet High and Rising, although rock comfortably remained the biggest genre among vinyl fans with a dominant 55% share of the market.
Amazon Music has announced a new AI-powered playlist feature that allows users to turn text prompts into entire playlists. Called Maestro, the offering is still in beta and available only to a small number of Amazon Music users on all tiers in the United States on iOS and Android. It can be found on the […]
Seventeen cartoon renditions of Taylor Swift — wearing pink sunglasses, posing in her purple Speak Now dress, posing in a “Not A Lot Going On At the Moment” t-shirt — are stamped onto an Amazon page for a 24-piece cupcake-topper set. “Our Singer cake decorations are made of high-quality food-grade cardstock,” reads the description. “Can be applied safely!” The $12.99 birthday party set, listed by the brand wgzftrys, which is headquartered in Guangdong Shen, China, is among the hundreds of Swift products available on Amazon — some bearing the megastar singer’s name and likeness, others using “TS” or a generic Taylor-ish young-blonde-woman image.
They’re mostly illegal bootlegs, according to music industry sources — a form of international intellectual property rights infringement that costs clothing, electronics, toy and sporting goods companies billions of dollars annually. In 2023, U.S. Border and Customs Protection seized nearly $2.8 billion in copyright-infringing goods shipped from multiple countries — most prominently China, Turkey and Canada. Jeff Jampol, CEO of Jam Inc., which manages the estates of the Doors, Janis Joplin, Jefferson Airplane and others, says that his lawyers serve “dozens and dozens” of cease-and-desist orders monthly to suspected bootleggers on a variety of e-commerce sites and other webpages who cost artists roughly $20,000 to $50,000 for every $1 million in annual t-shirt sales.
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“In terms of how much money we lose, who knows?” says Steve Culver, president of Dreamer Media, a Nashville merchandising company that works with Billy Joel, Paul Simon, Melissa Etheridge and others. “It’s just so easy to set up an Amazon store — if you get shut down, you just put it back up again.”
Reps for Swift and her label, Republic Records, didn’t respond to requests to comment for this story as they prepare to release her new album, The Tortured Poets Department, on April 19. But music merch companies have been battling this kind ofonline bootlegging for years, and they say the problem is getting worse. In 2021, Global Merchandising Services, citing rampant Motörhead trademark violations and counterfeiting, filed a lawsuit against 278 companies that “employ no normal business nomenclature and, instead, have the appearance of being made up.” These online stores sell knock-off t-shirts and other products, according to the suit, and each seller is “likely to cause and has caused confusion, mistake and deception by and among consumers.”
“It’s a game of Whack-a-Mole, and it’s a constant every day,” says Barry Drinkwater, executive chairman for the 15-year-old merchandiser, which handles products for Guns N’ Roses, Iron Maiden, Niall Horan and others. He estimates that the company issues “hundreds of thousands” of takedown notices annually: “All we can do is keep on top of it and spend some dollars,” he adds
Swift’s popularity is so immense that companies everywhere have co-opted her name, likeness and song titles to market and sell products big and small, from a Royal Caribbean International cruise for Swifties to “Tayl-gating” donuts to Swift flashing double middle-fingers on a t-shirt sold on eBay to the more than 1,000 Swift-themed items on handmade retailer Etsy. “There’s definitely bootleg and unauthorized stuff sold on Etsy, too,” says a representative for a major artist. “But are you going to go after the person who makes a necklace? No, you don’t want to be that guy.”
The Swift-branded knock-off products on Amazon — clearly different than those sold on her official store — include pillows, socks, pantyhose and keychains. A 14-piece friendship bracelet set, sold for $12.98 from GOIPKO, lists several of her albums and “I ❤️ TS”; a “Tay Tay Cheerleader Costume” for women, priced at $32.99 from Mokkin, bears the initials “TS.” A knit hat with the Nirvana logo (but not the Nirvana name), sold by a China-based company, goes for $9.99, while a pair of purple “Best Gaga Ever” socks, from the Chinese store ZJXHPO, is $14.99.
Some of these products brazenly use the artists’ names and likenesses, while others are more ambiguous. Regarding a t-shirt with an “It’s Me Hi I’m the Birthday Girl It’s Me,” intellectual property attorney Michael N. Cohen says, “It invokes a Taylor Swift lyric, but it is modified, so is it transformative enough? Possibly.” A Swift representative could send a take-down notice, in which case Amazon could answer that question – or, in the case of a lawsuit, a jury could decide.
(Several companies listing these kinds of Swift products on Amazon did not respond to interview requests by email, although one seller responded “sorry” and another wrote, “Sorry. We are not interested in it.”)
Amazon declined interview requests, but a representative cited its intellectual property policy for sellers, which prohibits violating the rights of “brands or other rights owners” and advises consulting a lawyer. Amazon has algorithms that suss out unauthorized or illegal products posted by sellers, but they can take time to detect and take down, especially if they’re ambiguous, like a t-shirt image that somewhat resembles Taylor Swift containing words that somewhat recall lyrics from her songs. Since 2020, according to the company, Amazon has spent $1.2 billion and employed 15,000 people to combat counterfeit and fraud on the site, and “valid notices of infringements submitted by brands” have declined 30% despite overall sales growth at the company. Amazon’s Counterfeit Crimes Unit is the department responsible for removing “bad actor accounts,” according to the company’s website.
Retail apparel bootlegging — as opposed to the separate problem of unauthorized t-shirts sold in concert parking lots — has increased over the last 15 years, Jampol says. During that period, three-dimensional printers have become more sophisticated and enabled the print-on-demand industry. “One of the barriers to entry for doing apparel is, ‘I’ve got to have five designs and four colors each both for men and women, in extra-small, small, medium, large, extra-large,’ then have a place to store it,” he says. “Now, with print-on-demand, I can put out 5,000 designs in 182 colors, and when somebody orders an extra-small in pink, of this style, I just print it.”
The bootleg merch is prevalent on many retail sites, including “fake e-commerce storefronts,” as the Motörhead suit alleges, which counterfeiters have set up to match artists’ official websites. With reputable retailers like Amazon, artists can file takedown notices — but it helps, Cohen says, for artists to trademark their names in advance. “Whatever platform it is, they’ll do their own formal review and make a decision whether to take it down,” Cohen says. “That’s why filing is so critical. That proves there’s validity. Amazon and platforms like that want to see: ‘Do you have the registration number?’”
In the United States, solo artists and bands have “trademark rights” for their names and likenesses, so they can send cease-and-desist letters or file lawsuits against unauthorized merchandisers. The process is trickier in a different territory. “You can own rights in one country, but not in another country,” says Douglas Masters, an intellectual property attorney in Chicago. “It’s a big world.” And even for artists who are aggressive about pursuing international copyright infringers, “People are sometimes hard to find,” Masters adds.
That’s why Gene Simmons, bassist for KISS, contacts his management company roughly every other day to flag an infringer on the band’s trademarked merch. “Gene is online all the time and comes up with more of them than anybody,” says Doc McGhee, the band’s manager. “It certainly is a big problem. We go after them. We have a team of lawyers. It’s just stealing.”
Pandora is firing back at a lawsuit filed by the Mechanical Licensing Collective (the MLC) that claims the company has failed to properly pay streaming royalties, calling the case a “gross overreach” based on a “legally incoherent position.”
The MLC — the group created by Congress in 2018 to collect streaming royalties — filed the lawsuit earlier this year, accusing Pandora (a unit of SiriusXM) of misclassifying the nature of its streaming service to avoid paying the kind of higher royalties owed by “interactive” platforms like Spotify.
But in its first response to the case filed on Tuesday (April 16), Pandora calls the MLC’s lawsuit a “wild overreach” that “distorts the Pandora experience” — and one filed by an entity that is not even legally empowered to bring such cases.
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“The MLC … was intended to be a neutral intermediary charged with collecting and distributing royalties under the blanket license,” Pandora writes. “It is not authorized to play judge and jury over a streaming service’s legal compliance, nor was it created … to pursue legal frolics and detours such as this one.”
Pandora’s lawyers also say the lawsuit is based on a “a legally incoherent position” that has never been raised by the music companies for whom the MLC is collecting royalties: “The MLC seems to think it knows something the entire music industry does not.”
A rep for the MLC did not immediately return a request for comment.
At the heart of the lawsuit against Pandora is the distinction between “interactive” platforms like Spotify or Apple Music, which allow users to pick their songs on demand, and “noninteractive” platforms that provide an experience more like radio. It’s a key dividing line since interactive and noninteractive services pay very different royalties under different systems.
Though Pandora offers a premium tier with on-demand functionality, it has long treated Pandora Free — the core radio-like product that fueled the company’s rise in the late 2000s — as a noninteractive service, since it largely serves users a mix of songs based on their preferences.
But in a February lawsuit, the MLC argued that Pandora Free had crossed the line into “interactive” status by offering so-called “Sponsored Premium Access” sessions, which allow users to briefly play specific songs in return for watching ads. As a result, the MLC argued that Pandora owed the same kind of royalties for Pandora Free as services like YouTube or Spotify pay.
“Pandora provides even greater interactive access and functionality than these other ad-supported interactive streaming services,” the MLC wrote. “Despite the interactive functionality of Pandora Free, Pandora has failed to report in full Pandora Free usage to The MLC.”
In Tuesday’s response, Pandora’s lawyers argued that the MLC’s lawsuit “badly distorts reality” by making a “blatant mischaracterization of Pandora’s offerings.”
In their telling, the disputed “Sponsored Premium Access” sessions are merely brief previews of the company’s on-demand tier with “strict caps” on usage — not a wholesale feature that would “transform” Pandora Free “into an interactive service like Spotify or Apple Music.”
What’s more, Pandora says that feature was explicitly negotiated with music companies, who have never once objected to it or argued that it required Pandora to “fundamentally change its approach to licensing.”
“The MLC apparently thinks it knows better than the entire music publishing industry,” Pandora wrote. “Not only is the MLC operating far outside its administrative bounds, but it is also completely wrong on the law.”
Speaking with Billboard on Tuesday, George White, senior vp of music licensing at SiriusXM and Pandora, echoed the claims made by Pandora in the legal response.
“The lawsuit is really a gross overreach, especially when you consider that Pandora is such a well-known and well-established non-interactive music streaming service,” White said. “There are no checks and balances on the MLC. We believe that’s something, as part of the MLC redesignation, that the Copyright Office really needs to consider.”
White was alluding to the Copyright Office’s ongoing “redesignation process” of the MLC — a five-year check-up required by Music Modernization Act to ensure that the organization is functioning effectively. The first-ever redesignation started in January and is set to wrap up later this year.
The Rights, a synch licensing clearance platform, launched publicly on Tuesday (April 16) following a beta test period that involved participation from two major music companies, Kobalt Music Group and Believe. Founded by a team of synch and licensing veterans with funding from a motley cast of investors, executives and entrepreneurs, the company is trying to build a better mousetrap that simplifies a time-consuming process and, possibly, reduces the threat from emerging technology.
Created in partnership with Dequency, a blockchain-based synch licensing company, The Rights purports to be a useful tool to handle the increasingly high volume of synch licensing requests from small productions like limited-release films, podcasts, content creation and concert footage. The goal is to make the process easier at scale by allowing a track with multiple rights holders to be cleared in a single transaction.
“We can match the agility of production music libraries and one-stop catalogs, yet offer the pricing flexibility, consent rights and customized terms required to maintain the premium value of commercial music,” said Tres Williams, founder/CEO of The Rights, in a statement.
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Williams is a former executive vp of business affairs at iHeartMedia who had similar duties at Thumbplay, a subscription music streaming service acquired by Clear Channel — later renamed iHeartMedia — in 2011. Williams is joined at The Rights by president Keatly Haldeman, who is founder/CEO of Dequency as well as co-founder/CEO of Riptide Music Group; and chief business officer Scott Marshall, another former executive at both iHeartMedia and Thumbplay.
The Rights has raised $7.5 million to date from the likes of film and TV production company Spyglass Media Group; Endeavor Entertainment; venture capital firm Borderless Capital; blockchain developer Algorand; Grit Capital Partners; iHeartMedia chairman/CEO Bob Pittman; and Elon Musk’s siblings: entrepreneur Kimbal Musk and Tosca Musk, the latter a filmmaker and co-founder of video streaming platform Passionflix.
Despite an explosion in opportunities for placement in streaming content, synch license revenue has grown at a slower rate than subscription streaming royalties. The global synch license market, as measured by the IFPI, grew 4.7% to $632 million in 2023 — a figure that covers recorded music only, not music publishing, and excludes production music libraries. That’s less than half the 11.2% growth in subscription revenue. In the United States, synch revenue grew 7.4% to $411 million last year, according to the RIAA, well behind the 10.6% growth in subscription revenue.
Now, synch licensing faces a threat from the sudden rise of artificial intelligence-created music. The Rights warns that AI-created music could grow into a multi-billion-dollar business in less than a decade, “siphoning revenue away from the artists and writers of the world’s most-desired songs,” it said in a press release. While technology has transformed everything from music distribution to marketing, the process of clearing synch licenses remains “untouched by tech efficiencies,” Haldeman said in a statement. “Our goal is to create infrastructure for the industry to make the clearance process smooth for both rights holders and licensees.”